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Sat, May 28, 2022 | 11:06
Economy
Upbit indicted for issuing fake cryptocurrency orders
Posted : 2018-12-21 16:56
Updated : 2018-12-21 20:27
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Seen above is the head office of Upbit in Gangnam-gu, Seoul. The Seoul Southern District Prosecutor's Office said Friday it indicted three of the crypto exchange's executives without detention for raking in 150 billion won with fake orders. / Yonhap
Seen above is the head office of Upbit in Gangnam-gu, Seoul. The Seoul Southern District Prosecutor's Office said Friday it indicted three of the crypto exchange's executives without detention for raking in 150 billion won with fake orders. / Yonhap
By Jhoo Dong-chan

The nation's largest crypto exchange Upbit is accused of manipulating its data processing system to rake in more than 120 billion won ($106.8 million) while falsifying 254 trillion won worth of fake orders to inflate the exchange's trade volume.

According to the Seoul Southern District Prosecutor's Office, Friday, two top-level officers and one employee of Upbit, including Dunamu's board director chairman surnamed Song, were indicted without detention for allegedly falsifying the exchange's data system to rake in 122.1 billion won. Dunamu is Upbit's operator.

The Financial Services Commission (FSC) reported the case to the prosecution, suspecting the crypto exchange of manipulating the data processing system via a bot program in a bid to inflate the amount of its virtual coin transactions.

The bot program was allegedly used to inflate underperforming virtual coins to attract more investors while falsifying the crypto exchange's trade volume, the FSC said.

The FSC added Upbit allegedly conducted this scheme twice last year, believing the crypto exchange fabricated orders from October 2017 to December 2017, then more recently on Dec. 18 this year.

The orders allegedly involved falsifying 254 trillion won worth of fake transactions in the period.

"I'm worried about investors who may lose money in this market because of exchanges like Upbit. We need a way to make the market and the industry fair and transparent," an FSC official was quoted as saying.

Seen above is the head office of Upbit in Gangnam-gu, Seoul. The Seoul Southern District Prosecutor's Office said Friday it indicted three of the crypto exchange's executives without detention for raking in 150 billion won with fake orders. / Yonhap
Dunamu CEO Lee Suk-woo
Upbit immediately denied the allegations.

"Upbit, as a corporate body, has never liquidated any assets acquired via fraud or used fraudulent assets to make further transactions," the crypto exchange said in a press release.

"We will fully cooperate with the prosecution's investigation to show the allegations are totally false."

According to the latest Blockchain Transparency Institute (BTI) report, Dec. 13, Upbit has become the world's third-largest virtual coin exchange in terms of trade volume.

It said Upbit's 24-hour trade volume was about $241 million in December, the third-largest after Binance and Bitfinex. If it is convicted of falsifying its transactions, however, the ranking table is expected to revise the Korean crypto exchange downwards.


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